Noble Group

[dydx]

Commodity trading for a middleman like Noble is a low-margin and risky business, and the short-term commodity markets are highly speculative with unpredictable prices movement. Being mostly holding 'long' positions in a host of different commodities, Noble would have to suffer when most commodity prices fall sharply and abruptly, as happened in oil, steel, etc. during the past year. It also doesn't help being a big player which naturally means having many big 'long' positions at the same time, and having borrowed large amount of debts from a big group of banks, who have granted Noble bilateral credit facilities as well as participated in the company's jumbo-size syndicated credit facilities. Being a big player also means Noble is exposed to many trade counter-parties from many different countries and legal jurisdictions, so when troubles or many defaults happen, these could quickly escalate to become very complex problems which may be too large to solve by the line managers in Noble, and some may just choose to leave to avoid the pain and responsibility.

Assuming Noble has 10 to 15% capital allocated to support a particular big commodity trade deal with another smaller commodity trader as counter-party with the remaining amount financed by a bank, and assuming the market price of the underlying commodity - say oil or steel - has fallen by say 30% suddenly within a short period of time during the contract period, and assuming the smaller commodity trader deliberately defaults on payment to try to avoid a loss by giving an excuse on deficiency in quality of the goods or shipment or something else, Noble would have lost its capital allocated in the trade and still have to put up extra funds to cover another 15 to 20% when unwinding the trade in the market and the borrowing from the bank. This is very tough business, isn't it?

[theasiareport]

Michael Dee: Time For The Noble Group Executive Chairman To Resign

http://www.sharesinv.com/articles/2015/0...to-resign/

"As such I have reluctantly reached the conclusion that Mr Elman must resign all official capacities with Noble, a new outside Executive Chairman installed, the board completely restructured, the auditors (E&Y) fired, and all the PR firms released. The current CEO and CFO should be given a short period of time to fully answer all questions fully or be fired as well."

This is getting a tad dramatic...

[level13]

The Chairman's letter is nothing but a cheap shot of painkiller.
It does nothing besides giving one a temporary relief but does not cure the root problem.

The price will continue its downtrend soon enough. I have no short/long interest but I have been telling friends who are keen to do some bottom fishing to think twice............ no make it three/four times.

Never under-estimate the word of mouth effect.

[CityFarmer]

The company first move, after the Chairman's letter?

Share buy-back of 25 million shares, or 0.37% of total outstanding shares in a day.

(not vested)

http://infopub.sgx.com/Apps?A=COW_CorpAn...9eea62f999

[greengiraffe]

Substantial holders buy back, co buy back... who on earth is selling... like I say could there be bigger conspiracies here especially since all the confident interests can't bail out at all?

The company first move, after the Chairman's letter?

Share buy-back of 25 million shares, or 0.37% of total outstanding shares in a day.

(not vested)

http://infopub.sgx.com/Apps?A=COW_CorpAn...9eea62f999

[financiallyfree]

actually i see that invesco bought 1,184,100 shares on 2th june, then sold 12,824,800 shares on 3rd june, causing it to drop below 5% causing it to cease to be a substantial shareholder. not sure what is going on.

and noble doing share buyback of 25m shares will reduce its cash reserve, think Mr Elman should use his own money to buy up the shares to show confidence.

[CityFarmer]

For a company with free-float of more than 50%, I reckon small retail investors are a good source to supply the shares...

(not vested)

Substantial holders buy back, co buy back... who on earth is selling... like I say could there be bigger conspiracies here especially since all the confident interests can't bail out at all?

The company first move, after the Chairman's letter?

Share buy-back of 25 million shares, or 0.37% of total outstanding shares in a day.

(not vested)

http://infopub.sgx.com/Apps?A=COW_CorpAn...9eea62f999

[vesfreq]

Nobel really hope their bankers could continue to be patient with them , otherwise all things may break loose.
If the Chairman cares about SHs and share price , he would not have behaved in that manner in the AGM.
Trying to do damage control with this announcement ?

You are exactly right. Investor confidence already damaged. Tough luck. I was vested at 84 cents. Heng dumped at 84 cents. Donated some money to my broker.

I was querying a banker on this matter. Apparently, the bankers can only wait and see. Pulling the line won't do anyone any good. If Noble sinks, the bankers lose a major client. No point. Don't pull they also stress. I think those bankers that have existing relationship can only continue, unless their credit gung ho enough to cut the lines.

Not vested.

[specuvestor]

^^ it's the same who blink first game. If one bank pulls the others will panic and pulls. The bankers are probably listening to each other more than the company

Like I said the short sellers understand this confidence game more than the understand the company's business

[greentea]

Bloomberg piece with various views on the share buybacks and current pricing...

Update: Noble Group still 58% away from analyst stock price targets http://btd.sg/1MvPfMd